Startup Unicorn Digit Insurance’s Rs. 2,600 Crore IPO Opens

There had been a bit of a lull in startup IPOs over the last few quarters, but Indian startups seem to be making their way to the public markets once again.

Insurance startup Digit has today opened a Rs. 2,614 crore IPO for subscriptions from investors. The issue is a combination of fresh issue of 41.4 million shares, worth Rs 1,125.00 crore, and offer for sale (OFS) of 54.8 million shares aggregating to Rs 1,489.65 crore. The price band of Go Digit’s IPO has been fixed at Rs 258 to Rs 272 per equity share. The IPO will be open from 15th May to 17th May for investors.

Interestingly, Digit has some star investors already on board — in 2020, cricketer Virat Kohli bought 2.66 lakh shares of the company for Rs 2 crore at a price of Rs. 75 per share, while his actress wife Anushka Sharma invested 50 lakh through a private placement. Virat Kohli had also appeared for TV ads for Digit, doing what the ads called was the ‘Digit dance’.

Digit has made a long way for being able to make India’s top cricketer dance to its tunes. The company was founded in 2016 by Kamesh Goyal who was a veteran of the insurance space — Goyal had over 30 years of experience in both general insurance and life insurance segments. Before founding Digit, he had been the Head of H8 – Asset Management, US Life Insurance and Allianz Insurance. Digit largely stayed under the radar, but raised funds from prominent investors including A91 Partners and Canada-based billionaire Prem Watsa’s Fairfax Holdings.

Headquartered in Bengaluru, Digit runs a platform which allows users to buy health insurance, car insurance, bike insurance, fire insurance, burglary insurance, and other insurance products. Digit says its USP is to make insurance products simple. “We’re simplifying insurance products so that even a 15-year-old can comprehend them,” it says on its website. Digit now claims to have served over 3 crore customers who’ve bought its products. In 2021, the company had become a unicorn with a valuation of $1.9 billion. Digit has been profitable since 2021, and recorded a net profit of Rs. 1,290 crore for the 9 months ended FY24, which was an increase of Rs. 100 crore over the same period in 2023.

Digit will join fellow insurance player Policybazaar in India’s listed space. Its listing appears to be the heralding of the second phase of Indian startup IPOs — in the first phase, companies such as Zomato, Paytm, Policybazaar, CarTrade and Nykaa had gone public. They have had varying experiences at the public markets — while Paytm’s stock has crashed and burned, Zomato currently trades at 2.5 times its IPO price, and has earned handsome returns for its investors. After a lull of a few quarters which saw a startup funding winter and underperformance of startup stocks, Digit Insurance now seems to be kicking off the second phase of startup IPOs, and with the tailwinds of a strong markets and an enthusiastic IPO market behind it, can expect a strong listing. And the listing will be keenly watched by startups waiting in the wings to go public — Swiggy has already filed for its IPO, and Oyo Rooms, Mobikwik and Meesho have all indicated their intentions to soon go public — so Digit’s IPO could set the barometer for how the street is now valuing Indian startups in their second phase of hitting the public markets.